Acquisitions, Development and Divestures (Tables)

9 Months Ended

Sep. 30, 2011

Notes To Financial Statements [Abstract]

Schedule of Acquisition

The fair value of the consideration paid for Central Networks was as follows (in billions):

Aggregate enterprise consideration	$	6.6
Less: fair value of long-term debt outstanding assumed through consolidation		0.8
Total cash consideration paid		5.8
Less: funds made available to Central Networks to repay pre-acquisition affiliate indebtedness		1.7
Cash consideration paid for Central Networks' outstanding ordinary share capital	$	4.1

The following table summarizes (in billions) the preliminary allocation of the purchase price to the fair value of the major classes of assets acquired and liabilities assumed.

Current assets (a)	$	0.2
PP&E		4.9
Intangible assets (b)		0.1
Other noncurrent assets		0.1
Current liabilities (c) (d)		(0.5)
PPL WEM affiliate indebtedness		(1.7)
Long-term debt (current and noncurrent) (c)		(0.8)
Other noncurrent liabilities (c) (d)		(0.6)
Net identifiable assets acquired		1.7
Goodwill		2.4
Net assets acquired	$	4.1

(a)       Includes gross contractual amount of the accounts receivable acquired of $119million, which approximates fair value.

(b)       Intangible assets recorded include $88 million of easements, which have an indefinite life, and $11 million of customer contracts, which have a weighted-average amortization period of 10 years.

(c)       Represents non-cash activity excluded from the Statement of Cash Flows for the nine months ended September 30, 2011.

(d)       In the third quarter of 2011, the preliminary purchase price allocation, as of the acquisition date,was adjusted to record a $77 million liability primarily for costs expected to be paid in order for WPD Midlands to become compliant with regulations pertaining to overhead line clearances. See Note 6 for additional information.

The actual WPD Midlands operating revenues,net income and net income excluding nonrecurring acquisition-related adjustments (which are recorded on a one-month lag) included in PPL's Statement of Income and included in the International Regulated segment, for both periods ended September 30, 2011 were as follows.

	Three Months		Nine Months
Operating revenues	$	292	$	499
Net Income		56		63
Net Income – excluding nonrecurring acquisition-related adjustments		118		183

The pro forma operating revenues and net income attributable to PPL for the periods ended September 30, which includes LKE as if the acquisition had occurred January 1, 2009 and WPD Midlands as if the acquisition had occurred January 1, 2010, are as follows.

	Three Months				Nine Months
	2011		2010		2011		2010
Operating Revenues - PPL consolidated pro forma	$	3,115	$	3,149	$	8,905	$	9,500
Net Income Attributable to PPL - PPL consolidated pro forma		497		489		1,306		1,062

Nonrecurring adjustments include the following pre-tax credits (expenses):

		Income Statement	Three Months				Nine Months
		Line Item	2011		2010		2011		2010
WPD Midlands acquisition
	2011 Bridge Facility costs	Interest Expense					$	(43)
	Foreign currency loss on 2011 Bridge Facility	Other Income (Expense) - net						(57)
	Net hedge gains	Other Income (Expense) - net						55
	Hedge ineffectiveness	Interest Expense						(12)
	U.K. stamp duty tax	Other Income (Expense) - net						(21)
	Separation benefits	Other operation and maintenance	$	(86)				(92)
	Other acquisition-related costs	(a)		2				(45)
LKE acquisition
	2010 Bridge Facility costs	Interest Expense			$	(45)			$	(67)
	Other acquisition-related costs	Other Income (Expense) - net				(4)				(11)

(a)Primarily includes advisory, accounting and legal fees recorded in "Other Income (Expense) - net."

Seperation Benefits

The separation benefits, before income taxes, associated with the reorganization are as follows:

Severance compensation	$	58
Early retirement deficiency costs (ERDC) under applicable pension plans		43
Outplacement services		1
Total separation benefits	$	102

Components of Discontinued Operations

Sale of Certain Non-core Generation Facilities

Following are the components of Discontinued Operations in the Statements of Income for the periods ended September 30.

	Three Months			Nine Months
	2011	2010		2011		2010
Operating revenues		$	34	$	19	$	91
Operating expenses (a)			118		11		147
Operating income (loss)			(84)		8		(56)
Other income (expense) - net			1				2
Interest expense (b)			2		3		5
Income before income taxes			(85)		5		(59)
Income tax expense			(32)		3		(21)
Income (Loss) from Discontinued Operations		$	(53)	$	2	$	(38)

(a)2010 includes the impairment to the carrying value of the generation facilities being sold and the write-off of allocated goodwill.

(b)Represents allocated interest expense based upon debt attributable to the generation facilities sold.